Empirical Research On The M&A Performance Of Chinese Real Estate Listed Companies

Merger and acquisition is an important way for enterprise to realize rapidexpansion and optimal distribution of resources, and also an effective way to deepenenterprise reform and adjust the industrial structure. The western five waves of mergerand acquisition practice, has proven M&A is the only way for enterprise to becomebigger and stronger. Enterprise M&A in our country has experienced a developmentprocess start from scratch, from small to large, from not standardized to standard.The development of China’s real estate industry has close relationship with reformand opening up and macro economy. In recent years, the integration speed of realestate industry is accelerating, real estate M&A activity is rising year by year both inquantity and amount, and become a hot issue of social concerns. In terms of theindustrial structure, China real estate industry has the following characteristics, marketconcentration is low,enterprise number is large and enterprise scale is small. In terms ofthe industrial properties, real estate industry is a resource intensive industry, capital andland is the lifeblood of real estate enterprise, the current macroeconomic policyincreases the difficulty of enterprise ’ access to land resources and development funds.Therefore, to get industrial integration and resource allocation optimization through themerger and acquisition, is the best way for real estate enterprise at present, as well as aneffective way to improve the industry concentration and achieve a healthy and stabledevelopment.Domestic and foreign scholars have carried out in-depth research companymergers and acquisitions motivation and M&A performance, but company M&A hasclose relationship with national economic system and development condition, has thefeature of complexity and diversity, therefore never get consistent conclusions.Especially in China’s current economic system,reform is in the transition process,mergers and acquisitions will be affected by various factors. So the study of China’s realestate company M&A performance has important theoretical and practical significance.This paper first reviewed the M&A Research， defined related concepts,introduced M&A motivation theory,target company valuation theory,M&A financingtheory. Then summarized the status quo of China’s real estate company mergers andacquisitions through a series of data and case. Analysised the development course ofChina’s real estate industry and the causes, mode and classification of M&A. The nextis theoretical analysis, first studied the general factor that influence company M&A performance and existing features and problems, On this basis, summarized real estatecompany M&A Performance’s three stage influencing factors.This article then didempirical research based on the theoretical analysis, firstly used the factor analysismethod, select the four indicators of profitability, capacity development, assetmanagement, capacity and solvency, studied the long-term performance of M&A. Thenused event study method, Measured M&A’s short-term impact to company wealthThrough the analysis of stock price changes between first90days and after30days ofmerger announcement.Through this research we found that the short-term M&A performance of Chinesereal estate company is better, the A&A company obtained significant short term wealtheffect.Through the analysis on the changes of abnormal return rate found there islikelihood of information disclosure in advance. The long-term M&A performance ofChinese real estate company takes about two years to realize scale effect and operatingsynergistic effect, and competitive advantage be shown gradually. The M&Aperformance of real estate company is influenced by many factors,such as the selectionof target company, payment choice,related party transactions, equity structure.Finally,this article put forward suggestions from three aspects of government,industry and real estate company to improve the M&A performance.